HSBC targets the FTB

Graham_Devon

Not a bad package. Not bad at all...

First-time buyers are being targeted with a new range of mortgages from HSBC, which is making £350m of lending available to borrowers with small deposits.

The bank has launched a range of fee-free mortgages with a maximum loan-to-value (LTV) of 90%, including a market-leading lifetime tracker. The bank is reserving £250m of its lending for first-time buyers until the end of the year.

The mortgages include a two-year fixed-rate loan at 4.49%, a five-year fix at 4.89%, and the lifetime tracker, which tracks at 4.09% above bank base rate. For those with a 15% deposit there is a two-year fix at 4.29%, a five-year fix at 4.69% and a lifetime tracker at 3.49% above base.

http://www.guardian.co.uk/money/2011/oct/14/hsbc-first-time-buyers-mortgage

Mixture of responsibility, and simple products. Like it!

Lokolo

Not bad at all? The rates aren't exactly heart warming. 4.09% above the base rate? Get real, thats a s*** rate! The 2 year fix at 4.49%? Not great either. I assume the rates stated are for 90% LTV, would be interesting to see the 80% and 85% LTV rates.

HSBC also are very strict on their lending criteria. I can get £150k mortgage with my income with most banks and BS', HSBC will only lend a maximum of £115k.

Now I for one love HSBC, but I wouldn't get a mortgage with them in the 80%+ LTV, they're not exactly competitive.

MacMickster

HSBC are also noted for being very picky about who they will actually lend to. Anything other than an absolutely unblemished credit record (and such buyers are likely to be able to get better deals elsewhere) then those first time buyers need not apply.

I seriously doubt that they will actually manage to lend that £350million by the end of the year, but it helps them to say that they made the funds available and were willing to (if only enough of the right people applied).

Generali

It's worth noting that picky lenders (eg HSBC, Nationwide) are solvent whereas less choosy ones (Northern Rock, RBS) aren't.

What do you want from lenders: cheap mortgages for FTBs followed by a bailout or risk priced correctly?

pinkteapot

HSBC's best rate on the lifetime tracker is base +1.99% for 60% LTV.

Their tracker goes as follows:

90% LTV base +4.09%
85% LTV base +3.49%
80% LTV base +2.79%
70% LTV base +2.39%
60% LTV base +1.99%

All of the above are their lifetime tracker fee free. There are a few variations at certain LTVs (Premier/Advance special rates and a version with a fee).

https://mortgages.hsbc.co.uk/mortgage-products

We got their lifetime tracker at base +1.99% in August 2010. Loving making big overpayments at the current interest rate. Joy of lifetime tracker = no limit on overpayments in the early years. With the way the economy is looking, would love to pay the mortgage off before the rates go up even once (though that's unlikely).

However, a lot of FTBs (especially those with just a 10% deposit) will be on pretty tight budgets in the early years of their mortgage. I would have thought that most would prefer the security of a fixed rate at that stage. The 2 year fix quoted above has a lower interest rate initially than the tracker and the 5 year fix is only 0.2% higher, so I'd imagine they'll sell more of these to FTBs.

Graham_Devon

Lokolo wrote: »

Not bad at all? The rates aren't exactly heart warming. 4.09% above the base rate? Get real, thats a s*** rate! The 2 year fix at 4.49%? Not great either. I assume the rates stated are for 90% LTV, would be interesting to see the 80% and 85% LTV rates.

HSBC also are very strict on their lending criteria. I can get £150k mortgage with my income with most banks and BS', HSBC will only lend a maximum of £115k.

Now I for one love HSBC, but I wouldn't get a mortgage with them in the 80%+ LTV, they're not exactly competitive.

HSBC are strict, but then they didn't need bailouts etc. They also had the lowest amount of compensation put aside for stuff like PPI reclaims.

They are one of the more senisble banks.

Don't pay the best rates. Don't charge the lowest rates. But they do do one thing. Sensible.

Lokolo

Graham_Devon wrote: »

HSBC are strict, but then they didn't need bailouts etc. They also had the lowest amount of compensation put aside for stuff like PPI reclaims.

They are one of the more senisble banks.

Don't pay the best rates. Don't charge the lowest rates. But they do do one thing. Sensible.

I totally agree with that, but I am a born and bred MSE, which means I will go for the cheapest deal and means HSBC is always written out of my "to look at" books, which is a shame.

OptionARMAGEDDON

On an HSBC BR + 1.99% and very happy with it. Overpaying at least 15% of the capital at the moment annually thanks to the low Base rate. Shame its all going to a chinese bank and not a brit one hey!

reweird

Super rates for our FTBs. Let's hope they take vantage of this as they're no excuses now not to buy if you want to.

Thrugelmir

Nice PR from HSBC. Reality is hardly significant.

£250 million would provide funding for around 2,000 mortgages. So is unlikely to set the market alight.

These funds are being ring fenced from overall funding. So will result in less money being available for remortgaging.

Jimmy_31

reweird wrote: »

Super rates for our FTBs. Let's hope they take vantage of this as they're no excuses now not to buy if you want to.

I think quite a few ftbs will take advantage of this, once they have found some work with a steady income of course.